Weekly Roundup February 9-13

Feb 24, 2015   //   by Profitly   //   Profitly, Profitly Weekly  //  Comments Off on Weekly Roundup February 9-13

Time for the weekly roundup. Here are Tim’s biggest winning and losing trades of the week:

Then Superman had one whopper of a trade to put him back over the $500,000 in profits for the year!

And here is a broad market overview:

Sector Performance (vs S&P 500) via FactSet:

Outperformers: Tech +4.27%, Materials +3.01%, Consumer Disc. +2.63%, Energy +2.62%

Underperformers: Utilities (3.32%), Telecom +0.07%, Consumer Spls. +0.96%, Financials +1.20%, Healthcare +1.36%, Industrials +1.58%

US equities finished higher for a second straight week with the S&P 500 ending at a record high. Why? Some of the credit went to heightened expectations for a deal between Greece and Europe. The geopolitical backdrop was also cited as supportive with the ceasefire agreement for eastern Ukraine. However, neither of these dynamics had ever really presented a headwind for stocks and there continued to be a number of issues in both cases that still needed to be sorted out. This left some of the focus on thoughts that the market has simply been working off the negative sentiment that accrued over the better part of January despite a relatively unchanged macro narrative.

This week saw a further bounce in oil, though broader market spillover seemed more muted. While the stronger January employment report out last Friday kept a mid-2015 liftoff in focus, there was also discussion about how a lower natural rate of unemployment could slow the policy normalization process. The market largely ignored disappointing retail sales and consumer confidence data this week, while there was some positive sentiment surrounding the better growth data out of Germany. Aggregate takeaways from another busy week on the earnings calendar were limited. Tech was the big gainer this week, while utilities was the only sector to finish lower for a second straight week.

Sentiment improves:

According to the latest Investors Intelligence survey, the bullish camp stood at 52.5% for the week of 10-Feb, up from 49% in the prior week. In addition, the bears slipped to 15.2% from 16.3% over the past two weeks, while just before that, they were at a six-month high.

Oil bounce continues:

The oil bounce continued this week. After rallying 9.1% last week, Brent crude gained more than 6% to settle at $61.52 a barrel. WTI ended the week 2.1% higher at $52.78 a barrel after jumping 7.2% in the prior week. While analysts remained skeptical about the read-throughs for production, rig count data and capex cuts remained the widely cited tailwinds. On Friday, Baker Hughes reported that the US oil rig count fell by 84 this week to 1,056, down 34% from the October 2014 peak and the lowest level since August 2011. A Reuters article also pointed out that OPEC’s strategy seems to be working as the three main monthly reports out this week on average raised their demand outlook for OPEC crude in 2015. However, this week also saw another batch of cautious sell-side commentary on concerns that the market is still oversupplied and inventories are likely to build further. Citi even noted that WTI could briefly trade as low as $20 a barrel.

Tech leads market higher:

Tech was the best performing sector this week. Much of the focus was on the momentum in AAPL +6.9%. There was no one specific factor for the strength, though comments from CEO Tim Cook at the Goldman Sachs Tech & Internet conference were well received, with some focus on capital returns. In addition, following presentations from a number of hardware companies, Goldman pointed out that continued stability in IT spending seemed to be a common thread, with enterprise demand described as sturdy.